Port Deal To Have Broader Review

Dubai Ports World, a maritime company in the United Arab Emirates that plans to take control of significant operations at six U.S. ports in a deal expected to be completed on Thursday, oversees operations at this port in Djibouti in Eastern Africa.
(By Ahmed Jadallah -- Reuters)

Network News

The Bush administration said yesterday that it has accepted a proposal from a Dubai maritime company to conduct a 45-day review of the national security implications of the company's plans to take control of significant operations at six U.S. ports.

The announcement by Dubai Ports World, brokered by the White House and Senate Majority Leader Bill Frist (R-Tenn.), appears to satisfy the demands of many members of Congress, who had threatened to force a security review if the administration would not conduct one. The deal also offered pledges to reassure the United States that the ports deal would not pose any threats to American safety and security.

The administration had approved DP World's $6.85 billion purchase of London-based Peninsular and Oriental Steam Navigation Co. (P&O) earlier this month without conducting a security review, after a broad interagency panel that looked at the transaction concluded the takeover of port operations in the United States would not affect the nation's safety.

But last week, members of both political parties erupted in furor, questioning the administration's judgment and promising to delay the deal, if not scuttle it. After President Bush vowed to veto any legislation that would thwart the Dubai company's plans, the most public clash between the Republican Congress and the Bush White House seemed in the offing. But yesterday's announcement may have headed off any showdown.

"We recognize that there are concerns regarding DP World's acquisition of P&O's U.S. terminal operations. Despite having already obtained approval by the federal government, we continue to take voluntary steps to assure people that the security of the U.S. will not be harmed as a result of this acquisition," said Edward H. "Ted" Bilkey, DP World's chief operating officer.

White House spokesman Scott McClellan said: "We are pleased that Dubai Ports reached a middle ground with Congress. The transaction was closely scrutinized by the appropriate national security and intelligence officials, and important safeguards are in place. We believe, however, the additional time and investigation at the request of the company will provide Congress with a better understanding of the facts, and that Congress will be comfortable with the transaction moving forward once it does."

Eric Ueland, Frist's chief of staff, said yesterday that the Senate majority leader would ask the relevant committees to continue oversight while the administration conducts its review, and he said the company will have to continue its efforts to reassure lawmakers.

But, he said, Frist and GOP leaders would not tamper with the secretive interagency administration panel, known as the Committee on Foreign Investment in the United States (CFIUS), during the review. The committee said yesterday in a statement that it welcomes the announcement and that it will "promptly initiate the review process and fulfill Dubai's request for a full investigation."

Sen. John W. Warner (R-Va.), who supports the deal, said on NBC's "Meet the Press" that the new agreement "spells out unequivocally the willingness of this company to give every means of support to help work this thing out."

Warner called the ports deal diplomatically and economically vital to the United States. "This is going to establish a precedent, and it's got to be done in a way not to choke off other opportunities," he said.

Lawmakers who had threatened to block or delay the deal welcomed a longer investigation. Rep. Peter T. King (R-N.Y.) said the new proposal probably would quell calls for emergency legislation in Congress this week. He said a deeper investigation is necessary of a United Arab Emirates-owned company operating U.S. ports.

"This was only 4 1/2 , five years ago that they were very close to bin Laden, they were supporting Taliban," King, who heads the House Homeland Security Committee, said on "Meet the Press." "And unless there's been a complete transformation, I have real concerns."